Exporters hit by weak rupee

New Delhi, May 12: With the rupee depreciating to above 42 level to a dollar, exporters who had taken forward contracts for the greenback sale between the 39 and 40 levels have suffered losses due to currency decline.

In an environment, where the rupee had been rising for the over last one year, several exporters who had suffered margin erosions took forward contracts of dollar sale at a value less than Rs 40 expecting the rupee to further strengthen.

However, their calculations have proved wrong with the rupee suddenly losing ground in the last 10 days.

Rupee on Monday closed at 42.06 to a dollar against 41.59 on Friday.

"Exporters are terminating the contracts at a loss. At the same time, some of them are taking fresh contracts based on their calculation of further appreciation of dollar," said Punjab National Bank general manager, treasury operations, Mr Arun Kaul

Federation of Indian Export Organisations director-general Ajay Sahai said that exporters have to take a calculated risk "by hedging at a value at which they are comfortable".

However, for those who have not done any hedging, the rupee depreciation of about five per cent in the last 10 days has come as good news,

especially when currencies of competing countries such as China, the Philippines and Thailand have appreciated. (PTI)